Since 1970, 41 states and the District of Columbia have repealed the antisubstitution provisions of their drug laws and enacted regulations allowing, and in some cases mandating, the substitution of less costly generically equivalent products for those prescribed. Analyses to date have shown little formal prohibition of drug product selection by prescribers but a very low rate of actual substitution by pharmacists. This study hypothesizes that variation in dispensing patterns (pharmacists' choice behavior) in general, and substitution rates (innovation) specifically, can be explained by inventory variation (which may be related to institutional commitment or predisposition to the innovation) and pharmacy characteristics (including size, type/ownership, and environment). An ongoing study to evaluate the impact of drug product selection legislation at Wayne State University Medical School has as its universe prescriptions filled in noninstitutional pharmacies in Michigan and Wisconsin during a four year period. The sample chosen for this dissertation project are those 130 Michigan and 114 Wisconsin pharmacies participating in the Wayne State study. Data are provided from questionnaires administered by the Wayne State group and Board of Pharmacy files. Time and extent of adoption of innovation will be operationalized. A determination of the extent to which variation in drug product selection behavior can be explained by inventory variety and pharmacy characteristics will be made.